Chains To Watch

Who has the potential to make the next significant mark on the hotel industry landscape? And we are not talking about Hilton, Marriot, Accor, Starwood, or Six Continents. HOTELS looks at up-and-comers who have parlayed everything from strategic deal making to creating a charismatic identity in order to build a business plan that has earned buy-in from investors, staff and guests.

By Mary Scoviak, Features Editor -- HOTELS Magazine, 5/1/2002

HOTELS’ annual feature on “Chains To Watch” is

about potential. While industry giants such as Accor, Hilton,

Marriott, Six Continents and Starwood are perennially worth “watching,” this

profile focuses on hotel companies poised to

make a significant mark. These are the chains that have parlayed

everything from strategic deal-making skills to charismatic

identities into a business plan that has earned buy-in from

investors, staff and guests.

Some, like Fairmont Hotels & Resorts, have achieved this

by pairing a long history of hotel expertise with a newly developed

knack for consolidation. Armed with a ready supply of capital

and a proven ability to drive RevPAR, Fairmont looms as a competitive

threat at the 4- and 5-star levels. Orient-Express Hotels is

one of the true pioneers of niche strategy. Travelers and shareholders

alike are drawn to Orient-Express’ ability to find and

acquire unique, under-performing luxury hotels

and manage them into profitability.

TUI Beteiligungsgesellschaft and Six Senses signal new directions

for the resort sector. An example of the benefits of vertical

integration, TUI has proven the potential of effectively marrying

a hotel company with a tour operator, pushing occupancies to

annual averages in the high 80s. Young and aggressive, Six

Senses is tapping pent-up demand for boutique resorts backed

by the comforting infrastructure of chain-enforced service

standards.

With the notable exception of Fairmont, none of these companies

looks likely to take on the multi-brand powerhouses who dominate

by sheer size and distribution. Yet, their impact in the travel

market makes them hard to ignore. Their influence is, generally,

much bigger than their portfolios. It is their strategy and

their ability to implement it that will make, or break, these

growing brands.

Fairmont: Rich, Hungry And Ready To Move

Everyone in the 4- and 5-star market

is looking over their shoulder at Fairmont,” says Paul Keung, analyst, CIBC

World Markets, New York City. It is not just acquisitions like

the Princess chain or the smooth execution of the Canadian

Pacific Hotels/Fairmont Hotels & Resorts deal that has

competitors worried. Toronto-based Fairmont comes to the table

with one of the strongest balance sheets in the business and “unusual” access

to capital thanks to last year’s innovative restructuring

of parent Canadian Pacific Ltd. It also has a 34% shareholding

in Canada’s largest real estate investment trust, Legacy,

and powerful partnerships with Prince Alwaleed’s Kingdom

Holding and Maritz-Wolff, which each hold a

16.5% stake in Fairmont.

If Fairmont is to capitalize on its potential,

it needs to put its balance sheet to work while sustaining

unit-level profitability. With only 38 hotels, there is ample

room for expansion. The immediate need is to fill obvious

holes in the U.S. market as Fairmont is present in just 10

of the top 25 markets. The challenge is finding deals that

match up with Fairmont’s

core 500-plus-room luxury profile, especially

at a time when there is little hotel real estate on the market

and owners are standing pat on pricing.

Acknowledging that Fairmont has “a pretty tight bandwidth

on our product,” Chris J. Cahill, president and COO,

says single-asset acquisition will be the most likely avenue

for growth. “The new build pipeline is virtually dry

in the United States, and not many portfolios fit our infrastructure,” he

adds. Dallas-based Wyndham Hotels & Resorts could be the

exception. Although Cahill “cannot speak specifically” to

acquisition rumors regarding the 130-hotel upscale chain, Fairmont

CEO William Fatt’s recent speeches indicate he sees buying

opportunities in the current U.S. market and

that Wyndham might be among them.

Fairmont is not just in the deal business;

it is brand building. Its 50/50 mix of business and resort

hotels, plus its upscale Delta brand in Canada, expand its

horizons to accommodate deals as diverse as last year’s addition of the 450-suite/villa

Fairmont Kea Lani resort on Maui and Fairmont’s first

hotel in Dubai, which opened in February. Looking

to drive incremental revenue, Fairmont rolled out a spa division,

branded as Willow Stream, and is contemplating the revenue-generating

power of a golf division as well.

Cahill’s goal is to raise RevPAR

4% this year. New e-commerce initiatives, centered on a redesigned

Web site with a guest portal, should help. Online bookings

increased 300% year-over-year, reflecting the dramatic growth

possible in a still embryonic vehicle. Extensive renovations

just completed at seven properties and a tower addition to

the Fairmont in San Jose, California, should also deliver

better yields with upgraded facilities and full inventories.

The cost side of the revenue equation

is under review. “Some

cuts introduced in the third quarter of 2001 are not sustainable

if we want to remain credible,” says Cahill. “We

have spent a lot of time looking at what is

important to our customers. We are trying to build a brand,

so we have to be selective about cost controls. This is still

a tight operating environment.”

Fairmont’s 20,000 employees dig deep to cut costs in

ways guests never see. A cooperative effort between corporate

and property management cut annual employee turnover more than

20% in one year at the Fairmont Scottsdale Princess in Arizona.

A new orientation toward building “backyard business” improved

the bottom lines of hotels throughout the chain.

While corporate creates the matrix that sets the targets for

each hotel, Cahill says it is the managers and staff who use

these plans to maximize the assets. A rigid hiring process

at every level has been integral to building a team that can

align ownership-management interests, Cahill adds.

This combination of ready cash and operational

track record makes Fairmont an attractive alternative for

owners looking for a manager, says Keung—especially in the case of larger

hotels and resorts that would benefit from high-end group business. “Fairmont

has some of the best urban assets in the United States and

Canada, as well as some of the best resorts,” says Keung.

The biggest near-term challenge is convincing investors with

a “show me” attitude that this brand building has

legs.

TUI Takes Big Bite Out Of Europe’s

Leisure Market

Vertical integration is one of the hot

topics at hotel industry conferences this year. TUI Beteiligungsgesellschaft,

based in Hanover, Germany, shows why. This 285-hotel group

with distribution in 30 countries consistently drives occupancies

into the high 80s thanks to the “value creation process” engineered

by the synergies of Preussag AG’s TUI Hotels & Resorts

and the World of TUI, the umbrella brand for

tourism activities.

Though not the first or only vertically

integrated enterprise, TUI has become the largest leisure

hotelier in Europe by offering the diversity of brands, hotel

concepts and destinations that serve the prolific demand

of the company’s core German

market. Each brand remains distinct in its

character and its image.

TUI’s travel agents and tour operators can offer a menu

of products and locations that match travelers’ leisure

demand in much of the world: Riu Hotels & Resorts, Grupotel

and Gran Resorts in Spain; Nordotel in Spain and Turkey; Iberotel

in Turkey and Egypt; Swiss Inn in Egypt; Grecotel’s complexes

in Greece; Atlantica, with its presence in Greece and Cyprus;

Dorfhotel’s family-oriented hotels in Austria, Germany

and Hungary; and Paladien Hotels, among others, in exotic locations

such as Martinique and Guadeloupe. ROBINSON and Magic Life

provide a club holiday alternative while Renthotels specializes

in sunny, long-haul destinations. TUI micro-manages not only

the range of brand families but the offerings within the brands.

Each has different room categories in all complexes, including

some meeting a “suite” standard, to broaden the

business base as much as possible for every

resort.

Timeshare figures as a key element in

current corporate strategy. Two years’ experience gained via a partnership with Anfi

del Mar on Gran Canaria, plus the double-digit annual growth

potential of the sector, convinced TUI to earmark US$6 billion

worth of capital for yearly investment in the timeshare sector.

Part of that will go toward buying a 51% stake in Anfi del

Mar, which now ranks as one of the most popular year-round

destinations for TUI, according to Manfred Schönleben,

head of the new timeshare business sector. At the same time,

TUI is growing its hotel portfolio by opening 12 new hotels

this year and rolling out cross-branded complexes such as Land

Fleesensee in Mecklenburg-Vorpommern, Germany, which combines

the concepts of ROBINSON Club and Dorfhotel. “The development

of hotel products flows from discussions with the group’s

tour operators,” says TUI Chairman Peter Seeger. “We

put hotels where they will satisfy our tour operators and guests.” Acquisition

in “high revenue” destinations is still on

the agenda, as is renovation of the existing

portfolio.

TUI takes a flexible approach to assimilating

its acquisitions. Corporate help comes in the form of state-of-the-art

technology, systems upgrading, financial planning and controlling,

implementation of service, quality and safety standards,

strategic planning and sales/marketing initiatives. Seeger

views corporate management’s

modus operandi as working with “partners” rather

than running subsidiaries. Acknowledging the expertise that

made its acquisitions attractive, TUI lets each group manage

its own brand. “Corporate coordinates the planning and

management of the entire hotel portfolio with the respective

hotel companies,” says Seeger. “But, the operating

activities are left up to the individual brands. This gives

them the flexibility to respond to the needs and opportunities

of their markets.” Maximization of yield management achieved

through co-operation with World of TUI, plus

strong revenue/cost control programs at the unit level, pushed

turnover to US$1.1 billion (e1.3 billion) last year.

Six Senses Deconstructs Resort Experience

There is already a mystique gathering

around Bangkok-based Six Senses Hotels, Resorts & Spas. Its sensory message

of “intelligent luxury” is striking a major chord

with high-spend travelers to and within Asia. The near-term

payoff for its design-conscious style and highly personalized

service is public relations power disproportionate with its

eight-hotel portfolio and such prestigious honors as Soneva

Gili’s “Best Leisure Resort in the World” and “Best

of the Best” rating from Conde Nast Traveler. More important

for the long term are the bottom-line benefits

of differentiation. Both Soneva Fushi in the Maldives, the

first of the Soneva brand, and Ana Mandara in Vietnam outpace

their competitive sets in terms of RevPAR. Market share analysis

indicates Evason Hua Hin in Thailand and Soneva Gili in the

Maldives should turn in similar performances beginning in 2003.

“I often say that what a guest is looking for from a

resort is totally different from what he or she requires in

a city hotel,” says Sonu Shivdasani, Six Senses’ owner

and executive chairman. “Things that make big, ‘recognized

brands’ so successful in the corporate markets might

work against them in resort settings. Would you stay at a US$1,000

a night resort with a name such as the Sheraton Grand, the

St. Regis or even Ritz-Carlton rather than Soneva Gili, which

has been called the best of the best?” Seeking to remain

at the sharp end, Six Senses employs a five-person “creative

team” to ensure that its concepts and operations continue

to deliver beyond expectation.

Seamless integration of memorable design

and highly personalized style define both the “beyond the stars” Soneva

brand and the 5-star Evason flag. “In a city hotel, a

guest wants to check-in in two minutes while having a mobile

phone conversation, order a drink in the middle of a conversation

with a colleague and get every request executed as quickly

as possible,” says Shivdasani. “A client spends

much more time interacting with staff at a

resort. Every staff member has to behave like a host.”

Each guest is “allocated” the same waiter and

same guest relations officer throughout his or her stay. At

Soneva Fushi, where package offers verge on US$1,400 (per person,

twin share) for four nights, the general manager, standing

barefoot and clad in resort wear, personally greets and says

farewell to guests after their arrival or before their departure

via seaplane. “A military approach to human resources

management may be relevant for a city hotel operator whose

focus is on achieving efficiencies by standardization. With

a resort, we have to focus on personalizing service,” Shivdasani

adds. It is hardly surprising that empowerment

is an essential ingredient in staff training.

Six Senses knows what it takes to operate

a city center hotel. Management of the D’MA Pavilion hotel in Bangkok is a “one-off” contract

from the company’s origins in 1992. “We do not

plan to have any more Pavilions,” says Shivdasani. “Our

focus is on high-end Soneva and Evason brand resorts in Asia.” This

resort-only emphasis changes Six Senses’ approach to

building the company and increasing visibility. Shivdasani

terms “marketing with public relations much more important

than advertising with sales” for resorts. Given the narrow

slice of the market it serves, Six Senses has

little waste in efforts to reach its target leisure clients.

Although some consultants say the boutique

hotel market may be stalling in urban markets, leisure travelers

continue to seek exotic, unique resort experiences. “This plays right

into the hands of players like Six Senses,” says Robert

Stiles, managing director, Sonnenblick-Goldman Co., San Francisco,

and regional managing director of Asian operations. Although

there is growing competition in the high-boutique market, Stiles

says owners may be willing “to overlook” Six Senses’ newness

and small size to access its creativity. Scott Hetherington,

executive vice president, Asia, for Jones Lang LaSalle Hotels,

adds that Six Senses’ willingness to take a financial

stake in every property and the presence of a strong capital

partner such as Deutsche Bank should also raise owners’ confidence

level.

Going forward, Six Senses needs to continue

to show discipline in the deals it accepts—both on

the investment and management sides. It also needs to refine

systems if it hopes to retain tight control over service

delivery and property style.

Orient-Express Hotels Maximizes Niche Strategy

The fact that Orient-Express Hotels’ (OEH) president

Simon M.C. Sherwood sees 2001 as a “fascinating year” says

a lot about the man and the company. On one side was a 25%

net earnings decline attributable primarily to the after-effects

of the September 11 terrorist attacks and, to a lesser extent,

to currency devaluations in South Africa and Brazil and the

dollar’s stronger-than-expected value against European

currencies. On the other, there was the momentum that led to

the early 2002 acquisitions of Le Manoir aux Quat’ Saisons,

La Residencia and a half interest in the Petit Blanc UK restaurant

chain from Virgin Hotels for US$40 million, as well as acquisition

of a 75% interest in Mexico’s Maroma Resort and Spa for

US$7.5 million. It was a learning experience,

says Sherwood, that taught OEH a great deal about resilience

and the strengths of its luxury 30-hotel portfolio.

Acquiring unique, under-performing assets

at “reasonable” prices

and turning them around quickly has become London-based OEH’s

stock in trade. “OEH knows how to put in an aggressive

sales and marketing team and ramp up performance for its recently

expanded and acquired properties,” says Paul Keung, analyst,

CIBC World Markets, New York City. Merrill Lynch’s David

Anders cites OEH for its demonstrated ability

in uncovering opportunities and its discipline in doing deals

that can be accretive in the near term. These strengths translate

to a target of 20% or more unleveraged return on the US$150

million being used to expand existing hotels, an investment

priority to grow OEH at sound multiples, and return on investment

at or above 20% for many of its acquisitions.

OEH may keep playing its hot hand for

acquisitions with some cherry picking in Starwood’s Ciga chain. Constrained

from commenting on acquisition rumors, Sherwood will say only

that it is “natural” for OEH to look at a deal

that would intensify its presence in Italy but that it definitely

would not be interested in the entire group. Neither is it

likely OEH would be interested in hotels encumbered by management

contracts. Sherwood says no place in the world is “off

limits” for deal making, as long as deals fit the company’s

profile in terms of a one-of-a-kind guest experience

and value-for-money pricing. He feels no pressure to build

a gateway network, preferring an opportunistic strategy that

weighs the asset within the context of its market.

Fast growth via acquisition would address

some analysts’ concern

that four hotels currently generate 45% of OEH’s income.

While acknowledging that a bigger portfolio would dilute that

risk, Sherwood sees this largely as a non-issue. “Many

businesses are reliant on sales of a core product. Should I

criticize the manager of the Cipriani if he continues to increase

profitability year after year? I see that as a reason to re-invest,” Sherwood

says. “Still, our dependence on certain properties will

obviously lessen as we grow.”

OEH’s general managers play a large role in its operational

success. Decentralized in its approach, OEH has only 20 to

25 staff at its corporate headquarters who oversee corporate

planning and serve as resources for property managers. “Corporate

staff is there to help, not to look over anyone’s shoulder.

I respect the general managers as business people and give

them the autonomy to manage their hotels. But that does not

mean prevent me from jumping on a plane if I see a problem,” says

Sherwood. A case-in-point was OEH’s handling of the post-September

11 downturn. Despite its public company status, corporate gave

its managers time to evaluate the impact of new booking patterns

and demand levels. Although some pricing cuts were made as

necessary, the fact that few OEH hotels have head-to-head competition

prevented profit-draining price wars. It also revealed a surprising

trend that showed corporate travel being cut faster and deeper

than leisure travel—previously thought to be more discretionary.

Questions also remain as to whether former

parent Sea Containers will spin off its 16.9 million Class

A shares and 20.5 million Class B shares by early July. Both

Anders and Keung have set US$25 as the targeted share price,

representing a 20% return. Generally, OEH’s track record, combined with its potential

for further acquisitions, its cross-selling power and long-term

potential for integration of its resorts, trains and cruise

lines into a one-stop luxury travel company add to up “buy” ratings

for a company a long way from market maturity.

Also Noteworthy

NH Hoteles, Madrid

Two significant deals in the first quarter

of this year put NH closer to its goal of becoming a pan-European

business hotel chain. The sell-off of Golden Tulip Worldwide’s franchise

business via a management buyout clears the way for NH to focus

on its core brand. Proceeds from the sale, along with US$80.1

million realized from the sale/leaseback of four hotels, helped

fund the acquisition of Astron, Germany’s third largest

chain. Astron’s 53-hotel portfolio gives NH a much-needed

critical mass in the strategic German market as well as toeholds

in Austria and Switzerland. This added distribution complements

NH’s decision to retain the 27 Golden Tulip properties

it owns and manages and rebrand them as NH hotels. A move to

expand its 20-plus% shareholding to a majority stake in Italy’s

Jolly Hotels is expected later this year. That

leaves only two major gaps: the UK and France.

NH has already proven it can operate

its 208 hotels. Its highly centralized systems approach is

one reason for below average staffing costs and efficient

management. Now, it has to demonstrate it can smoothly integrate

not only a Dutch but a German company, says Coré Martin Holgueras, director of valuation and

consulting, Jones Lang LaSalle Hotels, Madrid. NH’s US$6.9

million (e8 million) rebranding campaign should have all of

its hotels under the core banner by the end of 2002—a

scalding pace considering Sol Meliá has yet to finish

rebranding its Tryp hotels after two years. However, NH Hoteles

is determined to tighten its focus to one brand serving one,

well-defined market: business travelers. “NH has really

mastered this (the business hotel) product. They know how to

satisfy their clients’ needs,” says Martin Holgueras.

The flipside is the ever-present risk of having

no diversification except a 94% holding in Sotogrande, which

operates the most exclusive tourist complex on the Costa del

Sol.

APA Hotel Group, Tokyo

In just eight years, style-setting dynamo Fumiko Motoya transformed

an unprofitable regional hotel group into a muscular up-and-comer

with 26 hotels open in Japan, three more in the pipeline and

2001 pre-tax profits of US$7 million.

“Japan is our target. But we would launch APA in the

United States, Europe and other parts of Asia if we find good

foreign partners,” says President Motoya. Her near-term

goal of 10,000 rooms may require a change in APA’s basic

strategy to own and manage its hotels. Motoya

says a franchise program is under study. Plans to take the

company public would add considerable seed money for fast-track

expansion.

APA is building its balance sheet with a new Internet reservations

program and a decision to outsource some of its restaurant

and bar operations to companies such as Starbucks Japan.

Ishin Hospitality Group, Tokyo

Spawned by Soros Real Estate Partners (SREP) and Westmont

Hospitality Group, Ishin is laying the groundwork for a significant

operation in Japan.

Ishin closed two deals worth US$100 million in less than a

year and reportedly is working on further acquisitions.

It is doubtful Richard Georgi, managing

partner of Soros Real Estate Investors (SREI), will let those

opportunities pass by. An experienced bottom fisher, he likes

the potential of large, distressed economies like Japan’s. As proof, he

directed 25% of SREI’s investments into Japan.

In addition to deal shopping, Ishin and

its local partners have been hard at work building the operating

base and structuring a headquarters staff capable of pursuing

deals, working on transactions and repositioning assets.

It took 13 months to reposition the Kyoto Royal from a 3-star

to a 4-star and rebrand the Rihga at Narita Airport to the

Hilton brand. Now that Ishin has its feet wet, watch for

it to continue to overlay international brands on Westmont’s

savvy management as it expands.

Six Continents, London

Although speculation linked this multi-brand

giant’s

name with nearly every large portfolio deal done in 2001, it

chose to move only on the relatively modest 79-hotel Posthouse

chain and acquisition of the legendary Regent Hong Kong, which

it rebranded as its flagship Inter-Continental in Asia. Under

the radar, Six Continents managed to add 23,600 rooms last

year, put 69,000 more in the pipeline and carry with a major

overhaul of the “big 10” Inter-Continentals it

owns.

US$882 million (£600 million) is on the table this year

for brand-strengthening new builds and acquisitions. The company

line is that its strategy focuses on “investing hard” in

upscale hotels in gateway cities and resort destinations worldwide;

mid-scale distribution in western Europe and expansion of mid-scale

in North America. Analysts—and at least some shareholders—would

like to see Six Continents from the Bass brewing business to

work sooner rather than later. Adamant in its discipline, Six

Continents is finishing plans for Holiday Inn’s 50th

anniversary celebration this year, reshaping

the Inter-Continental brand and launching a new priority club

rewards program.

Rezidor SAS HOSPITALITY, Brussels

Last October, Radisson SAS rebranded

itself as Rezidor Hospitality, signaling its intent to become

a major corporate player in its own right. While some question

whether Rezidor has the cash to do big corporate deals without

a deep-pocketed financial partner, Kurt Ritter, president

and CEO, should have no trouble equaling 2001’s totals

of 10 hotels opened and management or licensing agreements

signed for another 21 properties. Saturation may become an

issue for this fast-growing 160-hotel portfolio. Mid-tier

Malmaison offers a vehicle but, with partner MWB facing tough

times, the brand may not see significant growth for several

years.

Still, development remains a key strength. “Some say

Rezidor SAS offers terms that expose them to too much risk.

That’s not particularly the case. Expansion is largely

through structured leases and management contracts, not through

the use of capital. Bahram Sadr-Hashemi (senior vice president

business development) is a creative dealmaker who makes deals

work,” says Charles Human, director, HVS International,

London.

Some sources see room for improvement

in RevPAR and cost containment. Rezidor showed its operational

commitment with moves such as the 15,000-call sales blitz

launched in the two weeks following September 11. Ongoing

refurbishments, new service programs such as “One Touch Service,” a “100% Guest

Satisfaction Guarantee” and a streamlined bookings process

look likely to boost the top line. Cost controls put in place

in the third quarter of 2001 should help Rezidor SAS top 2001’s

5.3% groupwide revenue gains.

Grupo Posadas, Mexico City

This could be one of the few home-grown

Latin American chains with break-out potential. Already the

largest owner and operator of hotels in Latin America, Grupo

Posadas has shown its flexibility in recent years with moves

like the roll-out of concepts such as Fiesta Americana Grand,

a new service category within its core “casual/luxury” Fiesta

Americana brand. Now, it will be under scrutiny to see how

nimble it is in weathering 2002.

Mid-priced Fiesta Inn remains the primary

growth driver for Posadas’ 13,000-plus-room portfolio. Its steady growth

is filling distribution gaps at a time of increasing demand

for business hotels in urban settings. “The domestic

business traveler is the fastest growing segment in Latin America—and

the most under-served,” says Christian Charre of Jones

Lang LaSalle Hotels, Miami. “Grupo Posadas understands

how to address this pent-up demand and looked

for ways to capitalize on the brand by expanding their product

lines.”

Increased business travel within Brazil

should benefit Grupo Posadas’ Brazilian hotels. Growth is on the agenda. However,

a US$105 million deal signed in 1999 with Inpar Construcoes

e Empreendimientos Imobiliarios LTDA to build 1,200 additional

rooms in Brazil has yet to bear much fruit. Two hotels are

planned for São Paulo, one at Guaruhols International

Airport and another in the exclusive Vila Olimpia

business/residential area. Rio de Janeiro and Minas Gerais

are the other near-term targets.

KSL Recreation, La Quinta, California

Last year’s acquisition of the La Costa Resort & Spa

is one more reason KSL can claim to be “one of America’s

leading owner-operators of resorts and recreational

facilities.”

KSL, whose US$2 billion portfolio includes

eight hotels with more than 4,249 rooms, is diversifying

its customer and profit base by expanding golf into “a multi-faceted entertainment

experience.” Improvements such as a new water recreation

venue for Miami’s Doral Resort and Spa, an 11,000 sq.ft.

(990 sq.m) treatment facility at Michigan’s Grand Traverse

Resort and Spa and a Greg Norman-designed course at California’s

PGA West broaden KSL’s reach to high-end leisure and

meetings business. More than 390,000 sq ft. (35,000 sq.m) of

meeting space make KSL’s properties a prime contender

for the incentive/group market, as well.

An affiliation between former Vail Associates

CEO Michael S. Shannon, COO Larry Lichliter and investment

firm Kohlberg Kravis Roberts & Co., KSL plans to grow

through acquisition and enhancement of its properties. Key

targets include under-performing properties with saleable

identities.

Hotel Distribution Systems, Dallas

Marriott, Hilton, Hyatt, Starwood and

Six Continents have formed a joint venture with Pegasus Solutions

to collect inventory and distribute rooms through Pegasus’ technology platform

to affiliate sites such as Orbitz and TravelWeb.com, which

Pegasus contributed to HDS. This warehouse gives chains more

control over the sale and distribution of franchisees’ inventory.